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From the Daily: Take the ‘U’ out of fossil fuel

Last Tuesday, the Central Student Government voted to reject a petition urging the University to reform its current substantial investments in the fossil fuel industry. Proposed by the Divest and Invest campaign, a coalition of students, faculty and community members, the petition called on University administration to disclose its investments in fossil fuel industries and commit to divesting the estimated $900 million the University presently holds in the industry. As a national leader in research and education that promotes sustainability, the University has a demonstrated obligation to invest in industries that align with the goals it espouses. When the new CSG executives take office, a renewed focus on sustainability must become a critical piece of the administration’s platform.

From creating the Program in the Environment major a decade ago to the Planet Blue campaign, sustainability on campus exists in many forms. In September 2011, University President Mary Sue Coleman announced a $14-million investment in sustainable projects, including hybrid buses and an alternative-fuel vehicle fleet as a means to reduce fossil fuel use. LSA also expanded after Coleman’s announcement, offering an academic minor in sustainability through the Program in the Environment. “I want the message to be clear: Sustainability defines the University of Michigan,” Coleman said.

While Coleman argues the University’s commitment to sustainability is clear, administrators have been opaque about the school’s investments in fossil fuels. Though Michigan law protects specific investment data from being made public, the University should be held accountable for how it spends money donated by the community it represents. The University’s investment office provides a breakdown by percentage of the school’s funds that are spent on various types of investments. According to statements made Monday by Erik Lundberg, the University’s chief investment officer, natural resources account for 9.3 percent of current investments. Making a further distinction between fossil fuels and alternative energy sources would add a level of accountability to a process in which many students and community members demand more transparency.

Currently, specific data on the University’s endowment investments in the fossil fuel industry are not available to the public, although the divest campaign estimates the current total to be over $900 million. The University’s endowment ranks as the second largest among public universities and seventh largest of any university in the United States, in part due to the profitability of these investments. The purpose of the endowment is to provide for the continued operations and financial growth of the University, a goal that is not at odds with its environmental responsibility. Industries focused on alternative energy and other environmentally friendly technologies are responsible for a growing portion of our economy. Ownership in these ventures would be lucrative and in line with the University’s self-defined ethical responsibilities and a commitment that would appeal to potential endowment donors with similar values.

While the Board of Regents stated policy is to not let social or political factors influence the University’s investments, there is a historical precedent for divesting from funds deemed socially irresponsible. Instances of this include pulling investments out of the tobacco industry in the early 2000s and from South African firms during apartheid. The University’s current investment in the fossil fuel industry is not only environmentally irresponsible but also runs in direct opposition to the research and social objectives set out by the University’s administration and students. CSG needs to be a driving force in urging the University to follow its own precedent and pursue responsible financial policies.